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What does the National Security Exception in GATT mean?

By Gerhard Erasmus
11 Jul 2019
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What does the National Security Exception in GATT mean?

The World Trade Organization (WTO) regime is rules-based. One of the implications is that the Member States can only invoke exceptions that are expressly provided for; national measures based on these exceptions must comply with the stated conditions; and such measures are justiciable. However, one of the GATT exceptions, the national security clause in Article XXI GATT, has always been in a category of its own, an exception among the exceptions. The Dispute Settlement Body of the World Trade Organization (WTO) has never passed judgment on the validity of measures taken under this Article.

What does this GATT provision allow? Article XXI GATT (Security Exceptions) provides:

Nothing in this Agreement shall be construed (a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or (b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests

(i) relating to fissionable materials or the materials from which they are derived;

(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

(iii) taken in time of war or other emergency in international relations; or (c) to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

In the GATT Analytical Index, the original thinking behind Article XXI has been explained as taking care “of real security interests and, at the same time, so far as we could, to limit the exception so as to prevent the adoption of protection for maintaining industries under every conceivable circumstance.”[1]

The hands-off approach to Article XXI is changing. The Trump administration’s policies to boost domestic industries play an important role in these developments but are not the only explanation. Some have been arguing that this provision provides scope for unique national measures that are not susceptible to judicial review.

A recent decision by a WTO Panel (adopted on 26 April 2019) in a dispute involving Article XXI provides more clarity and how this provision fits into global trade governance. We provide a brief discussion of the Panel Report in Russia – Measures Concerning Traffic in Transit.[2]

In 2014 Russia took over Crimea in a series of military actions that included the Crimean Peninsula, the Donbas region in eastern Ukraine, and related activities in other locations.[3] In the process Russia banned traffic from Ukraine destined for neighbouring countries. Ukraine declared a dispute and claimed that these transit measures violated Russia’s obligations under Article V (freedom of transit), Article X (publication and administration of trade regulations) of the GATT and commitments in Russia’s Protocol of Accession to the WTO. The Russian government argued that its measures were among those necessary for the protection of its essential security interests covered by Article XXI(b)(iii) of the GATT 1994. Russia also claimed that the Panel lacked jurisdiction to decide the matter.

The Panel found that, while the chapeau of Article XXI(b) allows a Member to take action “which it considers necessary” for the protection of its essential security interests, this discretion is limited to circumstances that objectively fall within the scope of the three subparagraphs of Article XXI(b). Consequently, the Panel rejected Russia’s jurisdictional argument that Article XXI(b)(iii) was totally “self-judging”.

The Panel concluded that Russia’s actions were objectively taken in time of an “emergency in international relations”. As for the discretion accorded to a Member under the chapeau, the Panel found that “essential security interests” could be generally understood as referring to those interests relating to the essential functions of the state. The specific interests at issue will depend on the particular situation and can be expected to vary with changing circumstances.

WTO Members must apply Article XXI(b)(iii) in good faith. The implication is that WTO panels may review whether this is the case and whether the challenged measures were “not implausible” as measures to protect essential security interests.

The Panel reported that the 2014 Crimea emergency was very close to the “hard core” of war or armed conflict and accepted the accuracy of Russia’s designation of its essential security interests. The challenged transit bans and restrictions were not so remote from or unrelated to the 2014 emergency that it was implausible that Russia implemented these measures for the protection of its essential security interests.

An important statement was then made: War or other emergency in international relations “involves a fundamental change of circumstances which radically alters the factual matrix in which the WTO-consistency of the measures at issue is to be evaluated.” Unlike the evaluation of measures are covered by the exceptions in Article XX,[4] an evaluation of measures under Article XXI(b)(iii) does not necessitate a prior determination that the measures would be WTO-inconsistent had they been taken in “normal times”.

So where does global trade law on the national security exception stand? The Russia Traffic in Transit decision relates to specific facts. It does, however, open the door for WTO Members to cite national security and to seek an exemption from global trade rules, provided that “essential security interests” are at stake and that these relate to the essential functions of the state. The specific interests at issue will depend on the particular situation. But such measures are, in principle, justiciable. President’s Trump plan to use the same legal basis for tariff increases are unlikely to be saved by the jurisprudence developed in this case. His legal advisors will have to come up with new factual explanations and legal arguments. They probably will – if the WTO dispute settlement system would, by that time, be operational.


[1] https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art21_e.pdf

[2] DS512. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds512_e.htm

[3] https://en.wikipedia.org/wiki/Russian_military_intervention_in_Ukraine_ (2014-present)

[4] This is the “General Exceptions” clause. It allows Members to take measures (provided they are not arbitrary or resulting in unjustifiable discrimination) necessary to protect public morals, protect human, animal or plant life or health, the conservation of exhaustible natural resources etc. These are peace time measures.

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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